Vodafone and NBN clash over 5G spectrum use

Vodafone Hutchison Australia and NBN are at loggerheads over the valuable 5G spectrum held by the government-owned business, which the former says could stifle the roll out of services by commercial providers.

Telcos are excited about 5G because it will enable faster speeds across longer distances to an array of devices that tend to struggle on 3G and 4G networks, such as virtual reality. Telcos want to get their hands on NBN's spectrum because, as the world plans for 5G, much of the technology is being made for that particular band.

Vodafone Hutchison Australia CEO Iñaki Berroeta says it has only become clear in the past year the 5G spectrum band NBN holds will be a major part of international standards for 5G technology. Brook Mitchell

Most have begun 5G testing, but 4G remains the most premium technology mobile users can access until networks rollout 5G, expected by 2020.

NBN has 5G spectrum in the 3.4GHz to 3.7GHz bands, often referred to as 3.5GHz, which it acquired from the Australian Communications and Media Authority, at market rates, after a directive from then Communications Minister Malcolm Turnbull in 2014.

"While we need to take account of the rights of existing users in any spectrum re-allocation exercise, we have an overriding duty to maximise the public benefit of spectrum allocations."

Mr Berroeta said he was advocating a discussion to identify options.

"The current owners of that spectrum must be able to deliver its services, and at the same time the right spectrum has to be made available to industry to benefit from the economies of scale on international standards," he said.

"There are definitely numerous alternative ways to ensure that both of these important objectives can be delivered. We should not assume that they are mutually exclusive without a quick but thorough examination of the options."

"NBN holds our 3.5GHz spectrum under licensing from the Australian Communications and Media Authority and we have paid full commercial rates to acquire our spectrum holdings," an NBN spokesman said.

Advertisement

"In addition, thousands of NBN fixed wireless end user premises are already receiving services using spectrum in the 3.5GHz band – and we plan to service thousands more end-users with this spectrum in the future. Our 3.5GHz spectrum is an extremely critical asset that enables us to deliver our commitment to provide access to high quality broadband to all Australians by 2020."

Telstra is also keen on a re-allocation of 3.5GHz spectrum and the auction for further 5G spectrum bands speed up.

"The 3.6GHz (3575-3700MHz) band is the highest priority at this time and the auction for this band needs to commence as soon as possible and by end of 2017. In parallel with the auction of the 3575-3700MHz spectrum we are also seeking a review to allocate further spectrum for MBB in the 3400-3575MHz range," a Telstra spokesman said.

"In terms of global support, the 24.25GHz – 27.5GHz band is the most mature 5G mmWave band and should be prioritised accordingly. We urge the ACMA to bring this band forward in the program by moving it from Monitoring to Initial Investigation. It needs to be given similar urgency as the 3.6GHz band."

An Optus spokeswoman said: "We invested strategically to build our spectrum assets, including the acquisition of Vivid Wireless, which provides us with 3.5GHz spectrum across Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra. In June 2015, we renewed our 3.5GHz spectrum licences to 2030, which positions us well for exploring and developing our 5G network capabilities."

"We welcome a restacking of the 3.5GHz band amongst existing owners to ensure the spectrum is efficiently used, noting 3.6GHz – 3.7GHz should be retained for fixed satellite service use. We understand that the 3.5GHz spectrum assets for current licence holders are in use, or earmarked for use. Optus' preference is for the ACMA to prioritise the re-planning of the 1.5GHz band over the 3.5GHz band."

The Vodafone boss urged a discussion to not repeat what he believes were mistakes in the allocation of 1800MHz spectrum, used in regional Australia, which meant many 4G services were not available in areas outside of metropolitan cities.

"Not only will new spectrum need to be made available, but far greater quantities of spectrum will be required and we must make sure that Australia benefits from global ecosystems by designing a spectrum strategy that is compatible with other bigger markets," he said.

Advertisement

"We need to learn the lessons of the regional 1800MHz spectrum. For many years this was severely under-utilised – to support a few fixed point-to-point links which could be provided through other spectrum bands and technologies. Leading edge competitive 4G services couldn't be rolled out outside the major capitals."

"Once this spectrum was re-assigned by the ACMA through an orderly process, it was auctioned, yielding hundreds of millions of dollars for government and enabling rapid deployment of 4G services in regional areas virtually overnight. A great result, but one which took many years too long," he said.

"I fear that we might be looking at another such situation. It has only become clear in the last year that the spectrum bands which are by far the biggest opportunity for internationally aligned 5G services are the 3.4GHz to 3.7GHz bands."

Max Mason is an award-winning journalist covering the media sector. He joined the The Australian Financial Review in 2013 and has worked at The Sydney Morning Herald, The Age, Fox Sports Australia and news.com.au. Connect with Max on Twitter. Email Max at max.mason@afr.com

More than 10,000 people poured into the nation's capital on the ninth day of protests over police brutality, but what awaited them was a city that no longer felt as if it was being occupied by its own country's military.